China Gold International Resources Corp. Ltd. · HKEX:2099
China Gold International Resources — Investor Presentation (September 2015)
29 slides from China Gold International Resources's investor presentation, Sep 21, 2015
Slide 1: Sustainable Profitability and Growth
TSX: CGG | HKSE: 2099 September 21, 2015 Sustainable Profitability and Growth
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation contains “forward looking statements” within the meaning of the United States private securities litigation reform act of 1995 and “forward looking information” within the meaning of applicable Canadian securities legislation. Such forward-looking stateme
Slide 3: Agenda
AGENDA Company Overview Financial Highlights CSH Gold Mine Overview and Expansion Update Jiama Polymetallic Mine Overview and Expansion Update Growth Plan (Organic Growth and M&A) Social Responsibility China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 3
Slide 4: Why Invest in China Gold International
WHY INVEST IN CHINA GOLD INTERNATIONAL Consistent Profitability Rapid Growth 5 years of consistent 8th year of growing profitability production capacity Unique Corporate Model Global Vision, Effective Cost International Team, Management Local Business Reduction in cash cost 2014 vs 2013 Ability to R
Slide 5: About China Gold International
ABOUT CHINA GOLD INTERNATIONAL Dual listed, profitable and growing gold Inner Mongolia and copper producer Two producing mines in China: CSH Gold Mine Baotou • CSH Gold Mine - Inner Mongolia Tibet Region • Jiama Copper-Polymetallic Mine - Tibet Region Lhasa The ONLY overseas listing vehicle of
Slide 6: About China National Gold Group (CNG)
ABOUT CHINA NATIONAL GOLD GROUP (CNG) CHINA NATIONAL GOLD GROUP OWNS 39% OF CHINA GOLD INTERNATIONAL Largest gold mining company in China Major Shareholder in both International Employment: 50,800 people and Domestic Listings – TSX and HK Stock Exchanges: BBB (Baa2) credit rating China Gold
Slide 7: Our Unique Corporate Model
OUR UNIQUE CORPORATE MODEL In China Internationally Viewed as a local Full TSX and HK listing Chinese miner allows access to global capital markets Full support of China National Gold Group – Building international our 39% shareholder corporate and Global Vision, government Access to the I
Slide 8: Experienced Board and Management Team
EXPERIENCED BOARD AND MANAGEMENT TEAM Top management of China Gold International Xin Song Bing Liu Lianzhong Sun Liangyou Jiang Chairman and Executive CEO and Executive Non-Executive Director Senior Executive Vice Director Director President and Executive Director ~30 years ~30 years Over 30 years ~
Slide 9: Resources/Reserves, Production
RESOURCES/RESERVES, PRODUCTION Combined Gold Reserve / Resource Copper Reserve / Resource Contained Gold Contained Copper CSH and Jiama Gold (M oz) Jiama’s Copper (Billion Pounds / Thousand Tonnes) Proven / Probable Reserve 5.9 Proven / Probable Reserve 5.9 / 2,692 Measured / Indicated Resource (1)
Slide 10: Financial Highlights
FINANCIAL HIGHLIGHTS Maintaining profitability despite lower commodity prices Realized average gold price Realized average copper price 1,700 1,611 (US$ per ounce) 2.9 (US$ per pound) 2.82 1,600 2.75 1,500 2.7 1,362 1,400 1,300 2.51 1,209 1,200 2.5 1,100 1,000 2.3 2012 2013 2014 2012 2013 2014 Reven
Slide 11: Q2 and 2014 Financial Highlights
Q2 and 2014 FINANCIAL HIGHLIGHTS Item Q2 ended June 30, 2015 Q2 ended June 30, 2014 Year ended Dec. 31, 2014 Revenues (MM USD) $84 $49 $278 Net Profit (MM USD) $10.6 $8.4 $42 Net Operating Cash Flow $(15.3) $(11.4) $31 (MM USD) Earning per share (US 2.54 cents 1.93 cents 10 cents cents) Cash Costs –
Slide 12: Cost Reduction – Gold and Copper
COST REDUCTION – GOLD and COPPER Company-Wide Cost Reduction Strategy Implemented Total Costs (gold) Cash Costs (gold) 11% reduction 17% reduction ($ per oz. gold) ($ per oz. gold) 920 920 866 870 870 820 768 820 770 770 720 720 707 670 670 620 620 590 570 570 520 520 2013 2014 2013 2014 Total Costs
Slide 13: Investment Grade Rating
INVESTMENT GRADE RATING China Gold International China National Gold Group’s Ratings by S&P Ratings by S&P and Moody’s “BBB-“ long-term corporate “Baa3” issuer rating to CNG by Moody’s. rating by Standard Poor’s Rating Services (“S&P”). “BBB” long-term corporate credit rating and a “cnA-” long
Slide 14: Superior Financing Capability
SUPERIOR FINANCING CAPABILITY US$ 500 MM Bond Issue - Benchmark in the international capital markets First US dollar denominated bond issue Amount $US 500 Million supported by a company’s credit rating Date July 17, 2014 outside of China in the history of the gold Rating BBB- companies in Asia Pac
Slide 15: CSH Gold Mine – Overview
CSH GOLD MINE – OVERVIEW One of China’s largest gold mines Located in Inner Mongolia of China, CSH Mine Resources ~ 210km northwest of the city of Baotou Tonnage Grade Gold Content Principal product: Gold dore bars with silver as a Resources (mt) (g/t) (Moz) by-product Measured 50.7 0.65 1.06
Slide 16: CSH Gold Mine – Expansion Completed
CSH GOLD MINE – EXPANSION COMPLETED H2, 2014 - Expansion finished, commercial production begins. Processing capacity increased from 30,000 tpd to 60,000 tpd 2015 gold production is expected to increase to ~208,980 oz Newly completed 30,000 tpd crushing system CSH gold production (’000 ounces) Im
Slide 17: Jiama Polymetallic Mine – Overview
JIAMA POLYMETALLIC MINE – OVERVIEW One of China’s largest Cu-Au polymetallic mines Located 68 kilometers northeast of Lhasa, Tibet Commercial production began in September 2010 Phase I Operation successfully completed and included: – open-pit and underground mining operation – processing plant
Slide 18: Jiama Polymetallic Mine – Expansion Progress
JIAMA POLYMETALLIC MINE – EXPANSION PROGRESS Processing capacity will increase from 6,000 tpd to 50,000 tpd Stage I of the plant has successfully undergone a wholistic load-free test run – end of 2014 Stage I is ready for loaded test run, scheduled in 2015 Two source pits ready to provide or
Slide 19: Jiama Polymetallic Mine – Geology
JIAMA POLYMETALLIC MINE – GEOLOGY Current Reserves and Resources Jiama Resources Grade Contained Metal Ore Cu Mo Au Ag Pb Zn Cu Mo Au Ag Pb Zn Category (mt) (%) (%) (g/t) (g/t) (%) (%) (kt) (kt) (M oz) (M oz) (kt) (kt) Measured 99 0.41 0.04 0.11 6.53 0.04 0.02 405 35 0.306 19.53 43 23 Indicated 1,38
Slide 20: Jiama Polymetallic Mine – Design of Phase II Expansion
JIAMA POLYMETALLIC MINE Design of Phase II Expansion China Gold International Resources Corp. Ltd | TSX: CGG – HKSE: 2099 20
Slide 21: Jiama Polymetallic Mine – Expansion Economics
JIAMA POLYMETALLIC MINE – EXPANSION ECONOMICS Robust Economics Support Phase II Development Life of Mine Capital Costs Distribution Operating Costs Mining 350 M 0.33 1.58 366 M Mining Processing Processing 11.50 Total Projected Capital Costs = $716 Million 10.06 Fixed Actual Capital Costs Expenditur
Slide 22: Growth Vision: Organic Expansion + M&A
5 YEAR GROWTH VISION: CHINA GOLD INTERNATIONAL: ORGANIC EXPANSION + M&A Accretive Acquisition AU 500,000 oz/year CU 330 MM lbs/year PRODUCER Organic Growth 2012 2013 2014 2015 2016 CSH Expansion construction Producing at Producing at full capacity. Gold Production 30,000 tpd to 60,000 tpd about 80%
Slide 23: Growth Plan – Accretive Acquisition Strategy
GROWTH PLAN – ACCRETIVE ACQUISITION STRATEGY Property Acquisition Criteria Valuation Transaction Structure Accretive to current Significant Stake in shareholders Selective the Project and acquisition strategy Resources/Reserves Target traded at a deep discount to Financed through: internal C
Slide 24: China Gold International – Ultimate Investment Opportunity
CHINA GOLD INTERNATIONAL – ULTIMATE INVESTMENT OPPORTUNITY World-class deposits with exploration potential Mining friendly jurisdictions Government support Support of the largest Chinese gold producer Global and award winning management team of mining experts Rapid Growth of production c
Slide 25: Awards
AWARDS “CSR (Corporate Social Responsibility) Model Enterprise” by the Corporate Jiama Social Responsibility Research Center of Chinese Academy of Social Sciences 2015 “1 Grand Award, 5 first grade awards, and 3 second grade awards Jiama for Technology Innovation Achievements” by China Gold Associat
Slide 26: Social Responsibility, Harmonic Development, Highest HSE Standards
SOCIAL RESPONSIBILITY, HARMONIC DEVELOPMENT, HIGHEST HSE STANDARDS Continue to strengthen safety management High HSE standards Harmonic development Improving community infrastructure: Jiama and CSH mine spent 120mm and 35mm RMB respectively funding local roads, drinking water systems, irriga
Slide 27: Share Information
SHARE INFORMATION TSX: CGG – HKSE: 2099 Capital Structure and Share Info Top 10 Institutional Holders (# shares) (As of September 19, 2015) (As of September 19, 2015) Issued and VAN ECK ASSOCIATES 396.4 M CORP Outstanding 17.53MM NORGES BANK 4.40MM Fully Diluted 396.8 M INVESTMENT… Options 0.4 M DIM
Slide 28: Current Status of Chinese Gold Industry
CURRENT STATUS OF CHINESE GOLD INDUSTRY 25% decrease due to 2005 – 2014 Gold Consumption in China demand becoming more rational as gold price continued to 41% increase due to gold decline price drop in Q2 2013 1,176 1200 which increased consumption 886 832 800 761 Tonnes 572 400 342 369 327 257 269
Slide 29: Current Status of Chinese Gold Industry (cont.)
CURRENT STATUS OF CHINESE GOLD INDUSTRY (cont.) First Half 2015 Gold Consumption in China 561 tonnes Gold Production in China Industry 268 tonnes Jewelry 47 tonnes 412 tonnes Investment 102 tonnes Significant gap between production and consumption Need for Imports: 2014 - 1,294 tonnes, 1H 2015 -
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